Loan Officer Admits Mortgage Fraud Involving 90 Properties

Allison Tussey —  January 15, 2013 — 1 Comment

Scott M. Wickersham, a loan officer and real estate agent, has been charged with conspiracy to commit mail fraud, wire fraud and bank fraud for his role in a mortgage fraud scheme.  The defendant pleaded guilty on January 11, 2013.

Wickersham was a loan officer for North American Mortgage Group, LLC, Summerville, South Carolina, a real estate agent and part-owner of Realty Executives of Coastal Carolina, Summerville, as well as a partner in Wickersham Holdings, North Charleston, South Carolina, and New Freedom Enterprises, LLC, Summerville.

According to the criminal Information, between April 2006, and November 2007, Wickersham allegedly conspired with others to unlawfully enrich themselves by causing mortgage lenders to provide money to the defendant and others, for the purchase of real property. Wickersham allegedly made false representations as to material facts stated in the applications for the mortgage loans for properties located at the following addresses:

Eddingsville Beach Road, Lot 1, Edisto Island, South Carolina;

Eddingsville Beach Road, Lot 4, Edisto Island, South Carolina;

Eddingsville Beach Road, Lot 5, Edisto Island, South Carolina;

82 Hunters Ridge, Charleston, South Carolina;

127 Lancer Drive, Summerville, South Carolina;

205 Fripp Point Road, Lot 2, St. Helena Island, South Carolina;

207 Fripp Point Road, Lot 1, St. Helena Island, South Carolina;

199 Fripp Point Road, Lot 4, St. Helena Island, South Carolina;

48500 Margate #L3, Myrtle Beach, South Carolina;•

Lowcountry Cove, Lot 1, Keowee, South Carolina;

Lowcountry Cove, Lot 4, Keowee, South Carolina;

Lowcountry Cove, Lot 8, Keowee, South Carolina;

Lowcountry Cove, Lot 2, Keowee, South Carolina;

255 Savannah Round, Summerville, South Carolina;

518 34th Avenue #2, Myrtle Beach, South Carolina;

518 34th Avenue North #1, Garden City, South Carolina;

8500 Margate Circle #1604, Myrtle Beach, South Carolina;

4800 Hearthside Drive, Summerville, South Carolina;

53S Pointe of Oaks Road, Summerville, South Carolina;

18 Pineland Avenue, St. Helena Island, South Carolina;

22 Pineland Avenue, St. Helena Island, South Carolina;

16 Pineland Avenue, St. Helena Island, South Carolina;

146B Seabreeze, Murrells Inlet, South Carolina;

146B Seabreeze, Murrells Inlet, South Carolina;

210 78th Avenue, Myrtle Beach, South Carolina;

5430 Chisolm Road, Johns Island, South Carolina;

503 Beverly Drive, Ladson, South Carolina;

2700 North Ocean Boulevard #1450, Myrtle Beach, South Carolina;

185 Old Dominion Drive, Summerville, South Carolina;

141 Mickler DrIve, Ladson, South Carolina;

129 Susan Drive, Summerville, South Carolina;

4716 Surf Street, Garden City, South Carolina;

127A Sunset Drive, Garden City, South Carolina;

9044 Robins Nest Way, Summerville, South Carolina;

700 Gate Post Drive, Mount Pleasant, South Carolina;

4712 Surf Street, Garden City, South Carolina;

303 Beverly Drive, Ladson, South Carolina;

408 Mayfield Drive; Summerville, South Carolina;

7200 North Ocean Boulevard #603, Myrtle Beach, South Carolina;

2710 South Ocean Boulevard #103C, Myrtle Beach, South Carolina;

213 28th Avenue, Myrtle Beach, South Carolina;

2710 South Ocean Boulevard #104, Myrtle Beach, South Carolina;

8988 Belle Verde, Myrtle Beach, South Carolina;

Lowcountry Cove, Lot 6, Keowee, South Carolina;

208 Nantuckett Drive, Summerville, South Carolina;

200 53rd Avenue #207, North Myrtle Beach, South Carolina;

200 53rd Avenue #209, North Myrtle Beach, South Carolina;

518 34th Avenue North #4, Garden City, South Carolina;

7603 North Ocean Boulevard #2F, Myrtle Beach, South Carolina;

45 Ocean Marsh Lane, St. Helena Island, South Carolina;

Eddingsv.ille Beach Road, Lot 2, Edisto Island, South Carolina;

355/359 Park Avenue, Aiken, South Carolina;

5301 North Ocean Boulevard #210, Myrtle Beach, South Carolina; .

2104 South Ocean Boulevard #210, Myrtle Beach, South Carolina;

8A Village Place, Tybee Island, Georgia;

5301 North Ocean Boulevard #405, Myrtle Beach, South Caroli’.la;

7B Village Place, Tybee Island, Georgia;

113 Village Place, Tybee Island, Georgia;

2A Village Place, Tybee Island, Georgia;

2B Village Place, Tybee Island, Georgia; .

4A Village Place, Tybee Island, Georgia;

5A Village Place, Tybee Island, Georgia;

3A Village Place, Tybee Island, Georgia;

16 Tybrisa Street, Units 209, 210, 211, Tybee Island, Georgia;

16 Tybrisa Street, Units 218, 219, 226, Tybee Island, Georgia;

16 Tybrisa Street, Units 120, 121, 122, 123, 124, 204, 205, Tybee Island, Georgia;

4B Village Place, Tybee Island, Georgia;

16 Tybrisa Street, Units 104, 105, 106, 107, 109, 110, 111, 117, Tybee Island, Georgia; and

7200 North Ocean Boulevard #601, Myrtle Beach, South Carolina.

According to the indictment, Wickersham and others sought to fraudulently induce mortgage lenders to provide money to the defendant in the form of mortgages, by locating a property to purchase, obtain an inflated appraisal, then recruit a buyer, usually a friend or family member, to buy the property at the inflated price.

The defendant referred to the buyers as investors. Wickersham allegedly told the investors that they would receive a percentage of the mortgage amount as payment at the time of the purchase of the property and that they would not be required to provide a down-payment on the property. The defendant then entered into an agreement with the investors in which New Freedom Enterprises agreed to place a renter in the property and/or make the monthly mortgage’payments until the property was sold. When the property was sold in the future New Freedom Enterprises would receive any appreciation in the value of the property even though the property was owned by the investor.

The defendant and others agreed to pay the homeowner’s association dues, utility bills, insurance premiums, and maintenance payments on the properties in addition to the mortgage payments.

The defendant and others further arranged for the mortgage loans to be approved on the basis of statements they knew to be false. Wickersham, and others, utilized North American Mortgage to prepare mortgage packages, which included loan applications, HUD-I Settlement Statements, appraisals, W-2s, and other financial information for the investor’s mortgage loans, that were fraudulent in some or all of the following ways:

1. The defendant and others provided false information about the investors’ income, the investors’ available funds in bank accoUnts, the investors’ resources, the investors’ liabilities, the investors’   then-current employment, and the investors’ employment history.

2. The investors were not interviewed by the North American Mortgage loan interviewer as indicated on the loan applications.

3. The loan applications falsely showed that the property was intended to be the investor’s primary residence.

4. The money paid at closing on behalf of the investors was reflected on the HUD-ls as cash from borrower. These monies were actually either given to investors by defendant and others, or were brought by defendant and others to closing on the investors’ behalf.

5. The prior property purchases done by defendant and others for the particular investor were not shown as liabilities on subsequent loan applications.

6. The signatures/initials of investors were forged on loan applications and HUD-l statements.

7. The mortgage loan applications were signed in blank by the investors.

8. The defendant and others provided false information in the form of letters to support statements about payment of rent on applications for mortgages.

9. The defendant and others distributed fluids differently than what was detailed on the HUD-l Settlement Statements for the underlying transactions.

10. The defendant arid others submitted inflated appraisals for the properties.

11. Vacant lots were presented as residential homes.

As a result, the loan packages submitted to the lender contained false statements, were supported by false documents, actively concealed material facts, and reflected property values that were too high. The loan packages were subsequently relied upon by the lenders in determining whether to make the loans and detennining the terms the loans.  In some instances, the defendant and others deposited funds into the investor’s bank accounts prior to the purchase of the properry so they would qualify for the mortgage loans. The money deposited by the defendant and others into the investor’s bank account to show inflated income balances, was deposited to induce the mortgage lenders to issue the loans.

In most instances, the investors’ were not aware that false employment and fmancial information was being provided to the mortgage lenders.

The defendant and others typically did not explain to the investors that they had arranged for inflated appraisals on the subject properties so that lenders would issue loans in amounts far exceeding the true market value of the property.

The defendant and others would shop the mortgage package around to various mortgage companies nationwide in order to fund the mortgage. The defendant and others wouid usually request a  mortgage in the same amount as the inflated appraisal amount. The seller of the property would receive his or her asking price at the sale/closing and the defendant and others would receive the difference between the sales price and the mortgage loan amount in the form of a commission or signing bonus from the buyer/investor, which was reflected on the HUD-l closing statement.

The defendant and others normally used an fnvestor for the purchase of two or mote properties. In some subsequent purchases, the previous property purchases by the same investor were not disclosed in the loan package to the mortgage lender in order to prevent the investor’s debt ratio from becoming too high.

In some instances, the defendant and others scheduled the purchases to take place within thirty days of each other so the mortgage lenders who were funding the loans would not see the other outstanding mortgages in the investor’s name on a credit report or in county property record filings. The defendant was able to do this because it normally takes thirty to ninety days for such information to show up when a property title check is done.

The defendant and others would sometimes use the same investor for multiple purchases over a longer period. of time. In those instances, the defendant and others would at times draft false lease agreements showing that the properties oWned by the investors were rented and therefore the rental incomes offset the monthly mortgage payments.

At times, the defendant and others would serve as “investors’ themselves, having properties appraised at inflated values and securing their own financing at the inflated appraisal amount. The defendant and others would use the proceeds from the sale to further the scheme, and would attempt to resell, and at times, did resell that property to another investor.

Wickersham utilized Realty Executives Coastal as the real estate company for the property transactions. The commissions andlor signing bonuses received by Realty Executives Coastal were placed in bank accounts controlled by the defendant and others. The real estate agent who handled the deal would usually receive nominal commissions. The remainder of those commissions were deposited into bank accounts of Realty Executives Coastal, New Freedom Enterprises, and North American Mortgage.

The defendant allegedly used the commission money to promote and further the ongoing criminal conspiracy by making some mortgage, utility, and homeowners’ association payments for the subject properties; by paying the investors for participating in the scheme, and by providing substantial down payments for investors on fraudulent purchases. The defendant and others also utilized significant portions of the commissions for their own personal gain.

Be Sociable, Share!

One response to Loan Officer Admits Mortgage Fraud Involving 90 Properties

  1. I knew this guy was bad news the moment I met him.

Leave a Reply

*

Text formatting is available via select HTML.

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>